See how inflation erodes the buying power of your money over time, and how much you would need in the future to match today's value.
Money sitting idle loses purchasing power every year to inflation. This is why long-term savings usually need to be invested to at least keep pace.
Divide 72 by the inflation rate to estimate how many years until your money buys half as much. At 3%, that is about 24 years.
Inflation is the gradual rise in prices over time, which means each dollar buys a little less than it did before. It is the quiet force that erodes savings, shrinks the real value of fixed incomes, and makes "a dollar isn't what it used to be" literally true. This calculator shows how the purchasing power of a sum of money changes over a period, so you can see what your money is really worth in different years.
Understanding inflation is essential for long-term planning. A retirement target or savings goal that ignores inflation will fall short, because the future dollars you accumulate will buy less than today's dollars.
Inflation compounds year over year, much like interest — but working against you. The change in value between two years is:
future value = present value × (1 + inflation rate)years
To find what past money is worth today, or what today's money will be worth later, the calculator applies the average annual inflation rate across the number of years you specify. Economists measure actual inflation using the Consumer Price Index (CPI), which tracks the price of a representative basket of goods and services.
How much would $50,000 need to grow just to keep pace, at an average 3% inflation rate?
| After | Equivalent needed | Lost purchasing power |
|---|---|---|
| 10 years | $67,200 | ~26% |
| 20 years | $90,300 | ~45% |
| 30 years | $121,400 | ~59% |
After 30 years at 3% inflation, $50,000 buys what about $20,500 buys today — a loss of nearly 60% of its purchasing power. This is why money sitting in a zero-interest account effectively shrinks every year.
When demand for goods outpaces supply, prices rise. Strong economies and increased spending can drive this.
When the cost of producing goods rises — energy, wages, raw materials — businesses pass those costs on as higher prices.
When the money supply grows faster than the economy's output, each unit of currency can buy less. Central banks manage this through interest rate policy.
Estimates use an assumed constant inflation rate and are for educational purposes only. Actual inflation varies year to year.